China steals $114 million U.S. defense deal with Peru

Trade between China and Peru, a key U.S. ally in the regional drug war, is at a new high. Now the Chinese defense industry is getting in on the action.

Military officials from Beijing increasingly are making high-level visits, pushing initiatives to protect Chinese nationals and companies here and, in some instances, undermining U.S. arms deals in order to sell their own weapons to this resource-rich Andean nation.

Last month, for example, the Peruvian Defense Ministry canceled a $114 million contract with a consortium that included U.S. defense manufacturer Northrop Grumman after a Chinese company convinced officials that the deal did not meet technical specifications.